U.S. President Donald Trump on Wednesday directed an immediate suspension of all trade with NATO ally Spain, escalating strains tied to defense spending and the Iran war despite European Union rules requiring trade negotiations to be conducted as a single bloc.
During a NATO summit in Ankara, which European leaders had hoped would put a lid on rifts within the military alliance, Trump instead reignited the dispute with Spain, calling Madrid a "terrible partner."
He also irked another NATO ally Denmark by reiterating that his country should control Greenland. Denmark promised to defend every inch of its territory.
It was the second time Trump has instructed Treasury Secretary Scott Bessent to halt commerce with Spain over its refusal to commit to NATO's new defense spending target of 5% of GDP. However, after his first such promise in March, trade between the two countries continued normally.
"Spain doesn't agree to anything, and you shouldn't carry them," Trump told NATO Secretary-General Mark Rutte, who later tried to soothe the tension by saying that Spain "made a huge step last year" raising its spending to 2%, although he added that "there are still issues we have to solve."
"I don't want to do any trade with them, alright?" Trump said, turning to Bessent, who replied: "Yes, sir." Trump then added, "Take it immediately. Don't even talk to them. They're hopeless. They're bad people... They make so much money with us, and we're going to see that they make a lot less."
EU vows to protect member states' interests
The office of Spanish Prime Minister Pedro Sanchez, who leads a minority leftist government, said in a statement it was treating Trump's statements as "business as usual" and did not intend to change the "excellent" relations it enjoyed with Washington.
It pointed out that Spain had a trade deficit with the U.S. and that economic ties were forged by private companies rather than governments, adding that as part of the customs and trade union, individual EU members could not be singled out.
Later on Wednesday, the EU said it will "always ensure" the interests of member states are "fully protected."
"We expect the U.S. to honor its commitments under that joint statement as we have honored ours," EU trade spokesperson Olof Gill said, referring to a trade pact signed last year between Brussels and Washington.
"The Commission will always ensure that the interests of the European Union and all our member states are fully protected. We will continue to advocate for stable, predictable and mutually beneficial trans-Atlantic trade for the benefit of all," Gill added.
Trump has repeatedly expressed frustration with Spain after Sanchez, a Socialist, refused to let the U.S. use its airspace or bases on its territory for the Iran war. Washington jointly operates with Madrid two key military bases in southern Spain for naval and air operations.
Spain is the world's largest olive oil exporter and also sells auto parts, steel, and chemicals to the United States, although analysts consider it to be less vulnerable to Trump's threats of economic punishment than other European economies.
Trump said he would air his grievances with fellow NATO allies at the leaders' consultations at the summit on Wednesday, including his long-standing ambitions to acquire Greenland, adding that he was "very upset" with NATO allies over unequal defense spending and a lack of support on Iran.